REAL ESTATE - Colonia, the German distressed real estate investor, posted group-wide revenues of €6.53m for the first half of 2006, up from €1.24m for the same period of 2005.

Acquisition activity in the first two quarters reflected a widespread bullish assessment of the German market, notably in residential. In the first and second quarters Colonia invested €200m in German properties.

At least some of the growth came from its asset management business, which in June was included in group’s year-end results for the first time.

In a press statement, the firm said it expected to up its investment volume to €500m by the end of the year and anticipated further “vigorous growth” from its real estate asset management arm.

Colonia last year acquired 56% of Cologne-based third-party real estate asset management firm Resolution. CRE Fonds Management, the majority owned asset manager that earlier this month announced that it had completed its management team, plans to launch its first closed-end fund at the end of the year. The fund will target real estate in the “promising and attractive” care market.

Christoph Wittkop, a spokesman for Resolution, said he expected the firm to double its investment in German real estate over the next 12 months, targeting an eventual figure of €1.5—2bn. Some of this target would be co-invested with Colonia but some of it would involve other third-party investors.

“From the investor’s point of view, competition for assets is already intense, including from foreign investors,” he said. “For the next 12—18 months, we expect the competition to be constant. After that, it will start to stabilise.”

Elsewhere, closed-end fund Falk-Fonds 80 has sold all of its six German commercial holdings to a 50—50 joint venture comprising Morgan Stanley Real Estate Funds (MSREF) and the Deutsche Immobilien Chancen (DIC) group for €160m.

The portfolio comprises office and service industry properties in Munich, Heilbronn, Würzburg, Nuremburg and Mainz.

Stephan Gramkow, an investor relations spokesman for DIC Asset AG, a listed subsidiary of DIC group, said the portfolio’s appeal lay in high-quality tenants and long leases. Three of the buildings have Deutsche Telekom as the main tenant. The other properties’ tenants are Siemens, BMW and Mediamarkt.